British business thinks it is harder to start a new venture now than 10 years ago in spite of the government's talk of creating a dynamic, entrepreneurial and competitive economy, the British Chambers of Commerce says today.

As Gordon Brown found himself again defending the government's gold sales at the turn of the millennium, the government hit back by claiming that British businesses were the most profitable in Europe.

The BCC, whose annual conference begins in London today, said a survey of its members found that when asked whether it was easier to set up a new business now than in 1997, 49% of firms responded that it was much harder while 20% said it was a little harder. The reasons companies gave were education and skills and red tape.

Of those polled, 41% blamed education and skills and 33% said red tape was the main priority that needed to be tackled.

David Frost, director general of the BCC, will tell the annual conference: "Businesses are succeeding in the UK through the desire and ambition of the hundreds of thousands of entrepreneurs who are battling to succeed in the competitive globalised economy. Politicians of all parties must not take this for granted and see businesses merely as a revenue stream to fund their spending.

"What we need is not just talk but action. Red tape needs to be cut and the education system needs to ensure that children leave school with skills that are relevant to the 21st century economy."

But in his speech to the BCC conference, the trade and industry secretary, Alistair Darling, tipped as a possible future chancellor, will point to an upcoming report on the profitability of European companies as showing that UK Plc is in fine fettle.

Mr Darling will unveil the Value Added Scoreboard - which lists the companies making the largest contributions in the UK and in Europe - more than a week early. It will show that British companies are dominant, making almost as much profit as French and German companies combined and one third of the European total. British corporate profits are also rising faster than elsewhere in Europe, he will say, growing at a rate of 12.4% compared with 9.6% in France and 5.4% in Germany.

"This report shows the UK is winning in the Champions League of European business," Mr Darling will say. "The secret ingredient to much of the success from our biggest companies is small business. They deliver half of UK output and over half of turnover. The ingenuity, skills and enterprise they show are helping win over our French and German competition as the centre of choice for European business.

"Which is why it is so important that we support R&D, raise skills and help companies export. The budget did that."

Meanwhile, at a weekend meeting of the International Monetary Fund in Washington, Mr Brown rejected accusations that Bank of England officials had advised him not to sell the country's gold reserves. "Gold sales are a decision for the government. They were a decision that I made as chancellor of the exchequer in the right and proper way," Mr Brown said.

Many countries at the time were doing exactly what Britain was doing, diversifying their portfolio and reducing the risks, the chancellor said. "Actually, at the time, the governor of the Bank of England, Eddie George, said to the Treasury select committee that the decision to sell gold was a perfectly reasonable portfolio decision."

He also said the bullion sale had been studied by the National Audit Office and a parliamentary committee. "The NAO said that it was in a transparent and fair manner that the sale had happened while achieving value for money."